Activation window reboot the PC

Hope one of you already encounter the same problem before, because it hard to explain the reason.
Anyway, I recently formatted and reinstalled my computer (old one - Pentium 866 with 0.5GB RAM) with Windows XP pro, and office 2007 etc.
When I connected to the internet, I could work with the internet explorer window for 15 sec before everything get stuck: the mouse freeze and one minute later the pc reboot itself.
I installed IE 8 hoping it will help but the same problem occurred.
I started work with firefox instead and it works perfectly, the only problem left is whenever I click on the windows activation icon, a window is about to open, but the second the blue head bar of the window pops, the system get stuck again with the exact same symptoms as before.
I tried to open Iexplorer with no add-ons using: iexplore.exe -extoff, but the problem stays.

nope.
When I open the IE8 it takes up to a minute and then the computer freeze for 10 sec and reboot itself.
When I click on the icon of the activation windows - the second the window opens I get the same thing: freeze for 10 sec and reboot.
Same happens when I try to open media player and run a movie, and I believe it will happen with many other features.

Any ideas?
BTW - I tried to repair windows installation but when i started I got into a dos screen when he ask me to type the number of the OS, and when I did nothing happend except of being in the dos window. what are my other options?